Emergency Managers — March 10, 2012 at 8:15 am

Harrisburg, PA under receivership that looks a LOT like a Mich Emergency Manager


Using financial crises to disenfranchise citizens

Last year, faced by over $300 million in debt from a failed trash-to-energy incinerator, Pennsylvania’s capital city Harrisburg attempted to file for Chapter 9 bankruptcy.

They were, however, rebuffed. A law passed in earlier in the year specifically to prevent Harrisburg from filing for bankruptcy prohibits them from doing so until July 2012.

In December, David Unkovic became the state-appointed receiver for Harrisburg as the state took control over the city. The appointment of Unkovic was controversial because he has ties to some of the city’s main creditors. However, a judge okayed the appointment determining that Unkovic did not have any conflicts of interest. A lawsuit was immediately filed to prevent placement of Harrisburg under receivership.

Unkovic filed a recovery plan that was resulted in a motion to asking the courts to suspend its implementation.

A motion was filed in federal court today asking for an emergency hearing and order to at least temporarily stop Harrisburg Receiver David Unkovic and Gov. Tom Corbett from implementing Unkovic’s fiscal recovery plan for the city.

Three Harrisburg community leaders today filed a motion asking for an emergency hearing to prevent Receiver David Unkovic and Gov. Tom Corbett from implementing Unkovic’s fiscal recovery plan.

The preliminary injunction was filed in a pending lawsuit three community leaders filed late last year claiming the state’s Harrisburg takeover law is unconstitutional. […]

Unkovic introduced the plan Feb. 6. It calls for the sale of Harrrisburg’s incinerator, lease of its parking system, renegotiated union contracts, the possible closure of a fire station and the hiring of a Chief Operating Officer to run the city.

Yesterday, Unkovic announced that the city would be defaulting on two of its debt obligations in order to ensure that essential services are still provided to Harrisburg residents.

Harrisburg will be defaulting on two municipal bond payments totaling roughly $5 million that are due next week.

State-appointed receiver David Unkovic announced the move Friday and said the decision to withhold payment was made to maintain sufficient cash flow to provide vital and necessary services.

The problem is that the city cannot pay what it owes to the bondholders and still be able to pay for essential city services, Unkovic said.

“The failure to make these payments does not diminish my resolve to move forward with the initiatives under the recovery plan,” he said in a statement.

Unkovic said that while bankruptcy remains an option, he feels the city is still better off following his fiscal recovery plan outside of bankruptcy.

Today, Rev. David Bullock, president of Rainbow PUSH Detroit and the Rainbow PUSH State Coordinator will be the keynote speaker at an Interdenominational Minister’s Conference public meeting in Harrisburg. Rev. Bullock has emerged a leader in the fight to repeal Public Act 4 – Michigan’s Emergency Manager Law. In Pennsylvania, as in Michigan, many are concerned about the disenfranchisement of residents, minority residents in particular. According to US Census figures, Harrisburg in 52.4% African American.

In a statement released this week, Bullock had this to say:

In Michigan, we face a very similar issue as the city of Harrisburg does. State occupation is bad public policy. I look forward to connecting Michigan with Pennsylvania as we fight for democracy. As we celebrate the 47th anniversary of Bloody Sunday and the Voting Rights Act, we realize we face a national campaign to disenfranchise the vote. In the face of a crisis, real or imaginary, dismantling democracy and lynching liberty is never a viable solution

I spoke with Rev. Bullock en route to the conference whose purpose, according the statement, is “to mobilize against the Pennsylvania legislature’s efforts to roll back the clock on voting rights and undermine the democratic electoral process with its unconstitutional state takeover of the city.” He told me today’s public forum is being hosted by the NAACP, various ministerial groups, and concerned citizens. “They are responding to what looks like a very similar thing to what is happening in Michigan,” he said. “One striking similarity, for example, is the unilateral power to sell off assets. What are the short and long term impacts of selling off assets for pennies on the dollar without citizen input and authorization?”

I asked him what the goals are of those who are protesting the state takeover of Harrisburg. Rev. Bullock said that citizens would like to “restructure the authority of a state-appointed dictator.”

“The Harrisburg situation is just like many of the cities facing Emergency Managers in Michigan,” he said. “Look at what these cities have: The Silverdome, lakeshore property, water assets. Harrisburg is similarly cash-poor but asset-rich.

“Harrisburg, Detroit, and other cities — urban centers — are running deficits.” This raises a bigger question about our national trade policy. As our national government has financial stress, it passes it down to states who then pass it down to municipalities. This has ended up resulting in the biggest similarity between Harrisburg and Michigan cities with Emergency Managers: the the disenfranchisement of city residents as their elected officials are removed.”

Rev. Bullock connected to Harrisburg organizers through a National Rainbow Push conference and his recent appearances on the Ed Schultz Show and the Rachel Maddow Show. As civil rights leaders from various areas began to connect and talk, they came to the realization that there appears to be a wider trend developing where financial crises are being used to sell off publicly-held assets, bust up public employee unions and, disenfranchise voters in the process.

“We started to come to the conclusion that this may not be a single, one-time push in Harrisburg or in Michigan,” said Rev. Bullock. “We decided that civil rights leaders and community leaders across the country need to stay connected and connect the concerned communities because this may be a national trend to disenfranchise people and sell off assets.

“Much like the civil rights movement that we’re celebrating this week on the 47th anniversary of the Selma to Montgomery march on Bloody Sunday, the fight is being led by African American clergy. That’s a good thing, it gives us hope. But it’s difficult to realize that, 47 years later, we’re still fighting the battle to ensure that all Americans have the right to vote. These policies highlight that fact that we don’t live in a post-racial America.”